BEIJING (dpa-AFX) - China's most-popular search engine Baidu Inc. (BIDU), Monday reported a jump in profit for the second quarter, as online marketing revenues surged 60 percent and customer base continued to increase. Both earnings and revenues for the quarter came in ahead of Wall Street expectations.
The company also provided its revenue guidance for the third quarter, which is expected to trump current estimates. Following the news, shares of Baidu rose seven percent in extended hours.
Commenting on the results, Robin Li, chairman and chief executive officer of Baidu, said, 'We are pleased to announce strong results for the second quarter despite macro headwinds and challenging comparisons with the same period last year. Our efforts to expand our customer base continue to make solid progress.'
Baidu generates majority of its revenues from search-engine advertising. Its online marketing revenues for the quarter surged 59.7 percent as advertises paid more for keywords to reach online users. China now boasts of having more internet users than any other country in the world, making it the biggest online market. Meanwhile, Baidu had to channel its marketing to smaller companies and adding them as customers, amidst the weakening Asian economy.
Baidu, China's biggest internet company by market value, increased its online marketing customers to 352,000, an 18.1 percent growth year-over-year and 9.7 improvement over last quarter. Revenue per online marketing customer rose 34.8 percent from last year and 16.5 percent from last quarter.
Baidu's revenues for the second-quarter grew 59.8 percent to 5.46 billion renminbi or $858.8 million. Analysts expected revenues of $850.78 million for the quarter.
Baidu's attributable profit for the second quarter was 2.77 billion renminbi or $436.0 million, up 69.6% from 1.633 billion renminbi last year.
Earnings per ADS for the quarter was 7.86 renminbi or $1.24, up from 4.67 renminbi or $0.72 last year. Analysts polled by Thomson Reuters expected earnings of $1.12 per share for the quarter. Analysts' estimates typically exclude special items.
Looking forward to the third quarter, Baidu expects revenues in a range of 6.245 billion renminbi to 6.410 billion renminbi, or $983.0 million to $1.009 billion. Analysts currently estimate revenues of $988.03 million for the third-quarter.
Li added, 'In the coming quarters, we will maintain momentum by rolling out optimized sales processes and more advanced tools to help current and potential customers increase returns on their online marketing spend. We will also continue to actively explore the vast opportunities in China's fast-emerging mobile Internet and cloud sectors.'
BIDU closed Monday's trading on the Nasdaq at $107.10, down $3.13 or 2.84%. The stock, in after-hours trade, gained $6.50 or 6.07%. Trading volume for the day was 7.2 million shares, above the three-month average volume of 4.2 million.
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